Small Business

Up, Up, and Away -- the Upselling Way

October 03, 2002

By Michelle Nichols These days, perhaps more than ever, adding new customers can be tremendously expensive. Total the cost of labor, marketing, sales overheads, customer-service, and administration, and you're looking at a big investment. Many outfits see attracting fresh clients as the only way to grow profits. But there is an alternative: Increase the size of each sale.

This is called "upselling," and it can make profits soar because you increase revenues without incurring any additional overhead. All it takes is some preparation and a little chutzpah.

The perfect time to upsell is after your client has decided to buy, but before the final purchase is tallied. Today, I want to give you a taste of the technique's ten flavors.

The most famous example of upselling is "the McDonald's close," otherwise known as, "Do you want fries with that?" Upselling is powerful because it's simple. Notice that McDonald's burger-flippers don't ask if you want "anything else?" with the order, they ask specifically about fries. This focuses the customer's mind from the abstract (anything) to the tangible (fries.) It's also a closing question that demands an immediate answer, not one customers can say they'll think over at their leisure.

Here are ten different ways to upsell your customers. If you really want to grow your sales, learn to use them all.

Better deal. If customers come in to buy one size, offer them a larger one. With most products, unit cost decreases with size, so this is very reasonable. For example, "Would you like a copier that can produce an extra 50 copies every minute? It will only cost you $300 more."

More feature. Most products have optional extras, so don't hesitate to offer them. For example, "With your new home, would you like to add a sunroom?"

Upgrade quality. Many products come in a variety of grades and qualities. If you know how the customer will be using whatever it is you sell, offer a reason why paying a little more for the next level might be of benefit. For example, you might pitch a baker on the idea that better-packaged eggs would save her money by decreasing the number of broken ones in each delivery.

Related products. Offer a complementary line of goods or services, as McDonald's does with its french fries. Are you selling, say, fax machines? Then you should think about carrying a line of tables to put them on.

Supplies. It's hard to think of a product that doesn't require supplies. My new fax machine certainly does. When I bought it, the salesperson pointed out that it came with nothing more than a small toner cartridge suitable only for in-store demonstrations. Not only did he sell me a regular-size cartridge, but paper as well.

Services. Often, there are services you can offer to go along with your products. The classic example: "With your new PC, would you like an extended warranty?"

Free gift. I once sold perfume in a department store at Christmas. The average bottle was about $40, so the store offered a free set of candles with a minimum purchase of $50. I would ask browsers, "Would you like these beautiful candles for free?" Their eyes would light up. Then I'd say, "All you have to do is purchase $50 of any kind of perfume and these candles are free." That really jump-started the selling process.

Financing. This can be a great profit generator. You can offer layaway, terms, and more -- even a company-affiliated credit card if your outfit is big enough.

Size matters. Offer not just a little more, but a lot. For example, "Individual copies are 10 cents, but if you order 1,500, the price drops to 8 cents." Believe me, this pitch works -- just ask the printer from whom I recently ordered a lot more stationery than I had originally intended!

Purchase contract. If your customers are only occasional buyers, offer to lock them into making more use of your product or service over a specified time period. For instance, if you happen to be a professional consultant whose normal rate is $100 per hour, you can offer 10 hours for $900 if used within, say, six months. My husband knows all about this: He recently bought a coupon for five oil changes instead of the one he went in to buy.

A great way to make sure you ask the appropriate upselling questions is to write up every order on a well-organized form. Title it "Estimate/Order Form." This will minimize you customer's hesitancy because, if he or she has not yet made a definite decision to buy, you can circle "estimate." By the way, asking the customer if this is an estimate or an order also can be a great closing technique!

FOOD FOR THOUGHT. On the form, leave room to record the basic order, then have subsequent categories like "Special of the Week," "Upgrades," or "Enhancements." Picture a waitress taking your order at a restaurant: she isn't shy about asking if you want the special salad dressing or a seasonal appetizer. She's just trying to give you a terrific meal. No matter what you sell, you can use the same I'm-here-to-please-you attitude as you write up your customer's order.

Let your competition scramble for expensive new customers. Upselling is a more profitable strategy. Happy selling!

(Oh, and by the way, a special thanks to one of my readers, TransWestern Publishing's Dick Larkin in San Diego, Calif., for sending me an e-mail about upselling.) Michelle Nichols is a Sales consultant, trainer, and speaker based in Houston. She welcomes your questions and comments and can be reached at michelle.nichols@savvyselling.biz